Should we give in to the temptation and purchase these gadgets on EMIs? The cautious answer is an ardent no!
For a nation like India where standard earnings are low in contrast with other developed or developing nations, we are inclined to spend too much on purchasing the latest electronic gadgets and devices. This trend of overspending on electronic gadgets is observed more in the young generation because of lifestyle reasons.
Taking into account that the normal life of a smart phone is about one year, we have to ask the question whether purchasing a smart phone on instalments is truly an intelligent choice. As it is we as a society are very extravagant with our money and now the mobile phone companies want us to waste more on purchasing their pricey and much-hyped devices. Should we give in to the temptation and purchase these gadgets on EMIs? The cautious answer is an ardent no!
Though it is a lifestyle preference and up to individuals to decide the type of phone they want to use, this choice has a major impact on the personal assets of an individual. Every personal monetary choice, no matter how big or small, has its brunt on the overall savings of the individual. With the modern trend of zero percent interest rate on EMIs (with unseen processing fee) and no down payment, the smartphone business is prospering for mobile phone makers, banks and telecom operators.
The instalment alternative appears eye-catching to individuals who cannot pay for a high-end phone but wish to own one. At a deeper level, individuals frequently fall for such offers because they are in search of immediate satisfaction. This temperament of individuals makes them vulnerable to such offers over the saving road.
Let’s take an example where an individual who can pay for a smartphone worth Rs. 12,000 gets tempted by the zero percent interest, zero down payment allurement of purchasing a smartphone of Rs. 36,000 on instalments. This person ends up paying a surplus of Rs. 24,000 beyond his limit. On the other hand, a sensible individual would decide to buy the smartphone that costs Rs. 12,000 and invest the surplus amount of Rs. 24,000 in a logical plan. Considering that he invests Rs. 2,000 every month for a period of 12 months at a 10 percent annual rate of return, he would amass Rs, 25, 281 at the end of the year. The same amount would be worth around Rs. 62,093 in ten years. Not to mention that the same individual over the period of 10 years would change at least five smartphones, getting enticed into pricier upgrades every year.
In the age where marketing experts drive social mania around the mobile phones, it is essential that we do not surrender to the attraction of spending more than what we can pay for. The money hence saved should be discreetly invested to accomplish more vital and crucial goals.
